EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of December 31,
1998, is entered into by and among BRANDYWINE REALTY TRUST, a Maryland real
estate investment trust (the "Trust"), BRANDYWINE OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership (the "Partnership"), Xxxxxxx X. Xxxxxxx, Xx. and E.
Xxxxxx Xxxxxx (each, an "Investor" and together, the "Investors").
RECITALS
WHEREAS, the Investors, directly or indirectly, collectively
hold a 50% general partnership interest(the "GP Interest") in Interstate Center
Associates, a Virginia general partnership, which they may cause to be
contributed to the Partnership in exchange for units of limited partnership
interests ("Units") in the Partnership in accordance with the terms of that
certain Contribution Agreement, dated as of September 28, 1998, by and between
the Partnership and Laveer Partners, L.P. (the "Contribution Agreement");
WHEREAS, pursuant to the Partnership Agreement (as defined
below), the Units will be redeemable for cash or common shares of beneficial
interest, par value $.01 per share, of the Trust (the "Common Shares") upon the
terms and subject to the conditions contained therein.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. In addition to the definitions set forth
above, the following terms, as used herein, have the following meanings:
"Affiliate" of any Person means any other Person directly
or indirectly controlling or controlled by or under common control with such
Person. For the purposes of this definition, "control", when used with respect
to any Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" means this Registration Rights Agreement, as it
may be amended, supplemented or restated from time to time.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York, New York are authorized by law
to close.
"Commission" means the United States Securities and
Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Partnership Agreement" means the Amended and Restated
Agreement of Limited Partnership of the Partnership, dated as of November 18,
1997, as previously amended and as the same may hereafter be amended, modified
or restated from time to time.
"Person" means an individual or a corporation, partnership,
limited liability company, association, trust, or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Registrable Securities" means any Common Shares issued or
issuable upon any redemption of Units issued pursuant to the Contribution
Agreement; provided that such Common Shares shall cease to constitute
Registrable Securities once: (i) a registration statement covering such Common
Shares has been declared effective by the Commission and such Common Shares have
been sold or transferred pursuant to such effective registration statement, (ii)
such Common Shares may be sold pursuant to Rule 144(k) under the Securities Act
or (iii) such Common Shares have been otherwise transferred in a transaction
that would constitute a sale thereof under the Securities Act, the Trust has
delivered a new certificate or other evidence of ownership for such Common
Shares not bearing the Securities Act restricted stock legend and such Common
Shares may be resold without subsequent registration under the Securities Act.
"Registration Expenses" means all expenses incident to the
Trust's performance of or compliance with Article 2, including, without
limitation, all registration and filing fees, all listing fees, all fees and
expenses of complying with securities or blue sky laws, and printing expenses,
the fees and disbursements of counsel for the Trust and of the Trust's
independent public accountants, but excluding fees and disbursements of counsel
or other advisors for the Investors and excluding any brokerage discounts or
commissions payable in connection with a sale of Registrable Securities.
"Rule 144" means Rule 144 under the Securities Act, as
amended from time to time (or any successor statute).
"Securities Act" means the Securities Act of 1933, as
amended.
2. Registration Rights.
2.1 Registration on Demand.
2.1.1 Registration of Registrable Securities. Subject
to Sections 2.1.3 and 2.1.6, within 150 days after the date hereof the Trust
shall prepare and file with the Commission a "shelf" registration statement
under the Securities Act covering the offer and sale of the Registrable
Securities by the Investors in an offering to be made on a continuous basis
pursuant to Rule 415 under the Securities Act.
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2.1.2 Registration of Other Securities. Whenever the
Trust shall effect a registration pursuant to this Section 2.1, other holders of
securities of the Trust who have registration rights may include all or a
portion of such securities in such registration, offering or sale.
2.1.3 Registration Statement Form S-3. Registrations
under this Section 2.1 shall only be required to be made on Form S-3, or any
successor form. In the event the Trust is not eligible to use Form S-3 to
register the Registrable Securities, it may delay the filing of the applicable
registration statement until that date on which the Trust is again eligible to
file a Form S-3. The Trust hereby represents and warranties to the Investors
that, as of the date hereof, the Trust is eligible to register the Registrable
Securities on Form S-3.
2.1.4 Expenses. The Trust shall pay the Registration
Expenses in connection with the registration effected pursuant to this Section
2.1. If a registration pursuant to this Section 2.1 is withdrawn or otherwise
not effected, other than at the request of the Investors, the Trust shall pay
the Registration Expenses in connection therewith. If the registration is
withdrawn at the request of the Investors and if the Investors elect not to have
such registration count as their single registration under this Section 2.1, the
Investors shall pay all the Registration Expenses of such registration (a
"Participating Holder").
2.1.5 Effective Registration Statement. A registration
pursuant to this Section 2.1 shall not be deemed to have been effected (i)
unless a registration statement with respect thereto has been declared effective
by the Commission or (ii) if after it has become effective, such registration is
interfered with by any stop order, injunction or other order or requirement of
the Commission or other governmental agency or court for any reason and has not
thereafter become effective.
2.1.6 Limitations on Registration on Demand.
(i) In no event shall the Trust be required to
effect more than one registration pursuant to this Section 2.1.
(ii) Notwithstanding anything herein, if the
Trust reasonably believes that the filing of a registration statement with the
Commission would adversely affect the contemplated activities of the Trust, then
the Trust may postpone the filing of the applicable registration statement for a
period not in excess of 30 days or, in the event the filing is being postponed
in connection with a proposed underwritten public offering of the Trust's
securities, for such longer period (not to exceed an additional 30 days) as may
be reasonably requested by the managing underwriter for such proposed offering.
(iii) Notwithstanding anything herein, if the
filing of a registration statement pursuant to this Agreement would require the
Trust to include in a filing with the Commission financial statements of
probable or completed acquisitions in order that such registration statement be
in compliance with rules and regulations of the Commission, then the Trust may
delay the filing of such registration statement until it has included the
requisite financial statements (including any necessary pro forma financial
information) in a filing with the Commission.
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2.2 Registration Procedures.
2.2.1 In connection with the registration of any
Registrable Securities under the Securities Act as provided in Section 2.1, the
Trust shall as promptly as practicable:
(i) prepare and file with the Commission the
requisite registration statement to effect such registration and thereafter use
commercially reasonable efforts to cause such registration statement to become
and remain effective;
(ii) prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective and to comply with provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by such
registration statement until all of such Registrable Securities have been sold
thereunder;
(iii) furnish to the Investors such number of
conformed copies of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits), such number of copies
of the prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such number of copies of such other
documents as the Investors may reasonably request;
(iv) use commercially reasonable efforts (x) to
register or qualify all Registrable Securities under such other securities or
Blue Sky laws of such States of the United States of America where an exemption
is not available and as an Investor shall reasonably request, (y) to keep such
registration or qualification in effect for so long as such registration
statement remains in effect, and (z) to take any other action which may
reasonably be necessary or advisable to enable an Investor to consummate the
disposition in such jurisdictions of the Registrable Securities to be sold by
such Investor, except that the Trust shall not for any such purpose be required
to qualify generally to do business as a foreign trust in any jurisdiction
wherein it would not, but for the requirements of this paragraph (iv), be
obligated to be so qualified or to consent to general service of process in any
such jurisdiction;
(v) notify the Investors upon discovery that, or
upon the happening of any event as a result of which, the prospectus included in
the registration statement filed pursuant to this agreement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, in the light of the circumstances under which they were made,
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and promptly prepare and furnish to the Investors such number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made;
(vi) use commercially reasonable efforts to list
all Registrable Securities covered by such registration statement on any
national securities exchange or over-the-counter market, if any, on which
Registrable Securities covered by such registration statement are then listed.
The Investors agree that upon receipt of any notice from the
Trust of the happening of an event of the kind described in Section 2.2.1(v),
the Investors shall forthwith discontinue their disposition of Registrable
Securities pursuant to the registration statement relating to such Registrable
Securities until the Investors' receipt of the copies of the supplemented or
amended prospectus contemplated by Section 2.2.1(v).
2.3 Holdback Agreements; Information Blackout.
2.3.1 Holdback Agreements. In connection with an
underwritten public offering of securities of the Trust, the Investors agree
that, if required by the underwriter or underwriters, they will not effect any
public sale or distribution, including any sale pursuant to Rule 144 under the
Securities Act, of any Registrable Securities, during the period commencing 10
days prior to the expected commencement of the offering and ending 30 days after
the closing of such offering.
2.3.2 Information Blackout. At any time when a
registration statement effected pursuant to this Section 2 relating to
Registrable Securities is effective, upon written notice from the Trust to the
Investors that the Trust has determined in good faith that sale of Registrable
Securities pursuant to the registration statement would require disclosure by
the Trust of non-public material information not otherwise required, in the
judgment of the Trust, to be disclosed under applicable law, the Investors shall
suspend sales of Registrable Securities pursuant to such registration statement
until the earlier of (a) 30 days after the Trust makes such good faith
determination and (b) such time as the Trust notifies the Investors that such
material information has been disclosed to the public or has ceased to be
material or that sales pursuant to such registration statement may otherwise be
resumed.
2.4 Preparation. In connection with the preparation and
filing of any registration statement under the Securities Act in which the
Investors are selling shareholders, the Trust shall give the Investors not less
than 15 days prior written notice of the preparation of such registration
statement and give the Investors and their counsel and accountants the
opportunity to review and comment on, at the Investors' expense, the
registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto (provided that the
Investors shall furnish the Trust with comments on any such amendment or
supplement as promptly as the Trust shall reasonably require).
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2.5 Indemnification.
2.5.1 Indemnification by the Trust. In the event of
any registration of any securities of the Trust under the Securities Act in
which an Investor is a selling shareholder, the Trust shall, and hereby does,
indemnify and hold harmless such Investor from and against any losses, claims,
damages or liabilities, insofar as losses, claims, damages, or liabilities (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon (a) any untrue statement or alleged untrue
statement of any material fact contained in any registration statement under
which such securities were registered under the Securities Act, any preliminary
prospectus, final prospectus, or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (b) any violation by the Trust, its
trustees, officers, employees or agents of this Agreement or any law applicable
to and in connection with such registration, and the Trust shall reimburse such
Investor for any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, liability,
action or proceeding described in clauses (a) or (b); provided, however, that
the Trust shall not be liable in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with information furnished to the
Trust by such Investor. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Investor and shall
survive the transfer of such securities by such Investor.
2.5.2 Indemnification by the Investors If any
Registrable Securities are included in any registration statement, the Investors
shall, jointly and severally, indemnify and hold harmless (in the same manner
and to the same extent as set forth in Section 2.5.1 above) the Trust and each
trustee, officer and employee of the Trust and each Person who controls the
Trust within the meaning of the Securities Act, with respect to any statement or
alleged statement in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with information furnished to the Trust by the Investors.
2.5.3 Notice of Claims, Etc. Promptly after receipt by
an indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding paragraphs of this Section 2.5,
such indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party, immediately give written notice to the latter of
the commencement of such action; provided, however, that the failure of any
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indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding paragraphs of this
Section 2.5, except to the extent that the indemnifying party is materially
prejudiced by such failure. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that the indemnifying
parties may agree, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party shall not
be liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof other than
reasonable out of pocket costs related to the indemnified party's cooperation
with the indemnifying party, unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties arises in respect of such claim after the assumption of the defense
thereof. No indemnifying party shall be liable for any settlement of any action
or proceeding effected without its written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. Consent of the indemnified party
shall be required for the entry of any judgment or to enter into a settlement
only when such judgment or settlement does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect such claim or litigation.
2.5.4 Contribution. If the indemnification provided
for in this Section 2.5 shall for any reason be held by a court to be
unavailable to an indemnified party under Section 2.5.1 or 2.5.2 hereof in
respect of any loss, claim, damage or liability, or any action in respect
thereof, then, in lieu of the amount paid or payable under Sections 2.5.1 or
2.5.2 hereof, the indemnified party and the indemnifying party under Sections
2.5.1 or 2.5.2 hereof shall contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating the same), (i) in such proportion as shall be
appropriate to reflect the relative benefits received by the Trust on one hand
and the Investors on the other or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect the relative fault of the Trust on one hand and the Investors on the
other that resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. No
Person guilty of fraudulent misrepresentation (within the meaning of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. In addition, no Person shall be
obligated to contribute hereunder any amounts in payment for any settlement of
any action or claim, effected without such Person's written consent, which
consent shall not be unreasonably withheld.
3. Decisions; Modification; Waivers. All decisions by, and
notices from, the Investors hereunder shall be made by the holders of not less
than a majority of the Registrable Securities outstanding held by the Investors
and all other holders of Registrable Securities shall be bound by any such
decision. This Agreement may be modified or amended only with the written
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consent the Trust, the Partnership and the Investors holding not less than a
majority of the Registrable Securities. No party shall be released from its
obligations hereunder without the written consent of the other party. The
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) by the party
entitled to enforce such term, but any such waiver shall be effective only if in
a writing signed by the party against which such waiver is to be asserted.
Except as otherwise specifically provided herein, no delay on the part of any
party hereto in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any waiver on the part of any party hereto of any
right, power or privilege hereunder operate as a waiver of any other right,
power or privilege hereunder nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any right, power or privilege hereunder.
4. Entire Agreement. This Agreement represents the entire
understanding and agreement between the parties hereto with respect to the
subject matter hereof and supersedes all other prior and contemporaneous
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof.
5. Severability. If any provision of this Agreement, or the
application of such provision to any party or circumstance, shall be held
invalid, the remainder of this Agreement or the application of such provision to
other parties or circumstances, to the extent permitted by law, shall not be
affected thereby; provided, that the parties shall negotiate in good faith with
respect to an equitable modification of the provision or application thereof
held to be invalid.
6. Notices. All notices, requests and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be delivered (i) in person, (ii) by certified mail, return receipt
requested, (iii) by recognized overnight delivery service providing positive
tracking of items (for example, Federal Express), or (iv) by confirmed
telecopier, in each case addressed as follows:
If to the Trust or the Partnership, addressed to:
c/o Brandywine Realty Trust
Newtown Square Corporate Campus
00 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, President and
Chief Executive Officer
Fax: (000) 000-0000
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with a copy in each instance to:
Xxxx X. Xxxxxxxx, General Counsel
Brandywine Operating Partnership, L.P.
Newtown Square Corporate Campus
00 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Fax: (000) 000-0000
If to the Investors, addressed to:
c/o Xx. Xxx Xxxxx
Riverfront Plaza, West Tower
000 Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
with a copy in each instance to:
Xxxxxxxx X. Xxxxxx, Esquire
Williams, Mullen, Christian & Xxxxxxx
0000 Xxxx Xxxx Xxxxxx
0 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
or to such other address or addresses and to the attention of such other person
or persons as any of the parties may notify the other in accordance with the
provisions of this Agreement. All such notices, requests and other
communications shall be deemed to have been sufficiently given for all purposes
hereof only if given pursuant to the foregoing requirements as to both manner
and address, and only upon receipt (or refusal to accept delivery) by the party
to whom such notice is sent. Notices by the parties may be given on their behalf
by their respective attorneys.
7. Counterparts. This Agreement may be executed in
counterparts, each of which for all purposes shall be deemed to be an original
and all of which together shall constitute the same agreement.
8. Headings. The Section headings in this Agreement are for
convenience of reference only, and shall not be deemed to alter or affect the
meaning or interpretation of any provisions hereof.
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9. Construction. This Agreement shall be governed, construed
and enforced in accordance with the laws of the Commonwealth of Pennsylvania
without regard to its principles of conflict of laws.
10. Recapitalizations, etc. In the event that any shares of
beneficial interest or other securities are issued in respect of, in exchange
for, or in substitution of, any Registrable Securities by reason of any
reorganization, recapitalization, reclassification, merger, consolidation,
spin-off, partial or complete liquidation, share dividend, split-up, sale of
assets, distribution to shareholders or combination of the Registrable
Securities or any other similar change in the Trust's capital structure,
appropriate adjustments shall be made in this Agreement so as to fairly and
equitably preserve, as far as practicable, the original rights and obligations
of the parties hereto under this Agreement.
11. Term. This Agreement shall continue in full force and
effect until the earlier of (i) six (6) years after the date hereof and (ii) the
date on which the Common Shares issued or issuable upon redemption of Units
issued pursuant to the Contribution Agreement have ceased to constitute
Registrable Securities.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed on the date first above written and delivered by their respective
duly authorized officers.
BRANDYWINE REALTY TRUST
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: President & CEO
BRANDYWINE OPERATING
PARTNERSHIP, L.P.
By: BRANDYWINE REALTY
TRUST, its sole general partner
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President & CEO
INVESTORS:
/s/ Xxxxxxx X. Xxxxxxx, Xx.
-------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
/s/ E. Xxxxxx Xxxxxx
--------------------------------
E. Xxxxxx Xxxxxx
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